The average inheritance tax (IHT) bill could reach £233,000 in the 2023/24 financial year, new research from Wealth Club has indicated.
Figures from the investment platform have forecast that this would see over 30,000 families having to hand over part of their inheritance to the tax man.
This would represent a 9% rise in the average IHT bill, and a 12% rise in the number of estates paying the tax.
Wealth Club’s research also suggested that both the average IHT bill and the number of families paying IHT are expected to hit a high in 2022/23 before falling back slightly.
Average IHT bills could hit £275,000 by the end of the decade, while the number of families paying IHT could reach 34,500.
Wealth Club’s research follows the publication of HMRC’s most recent IHT statistics in July, and assumes that IHT thresholds will remain frozen at their current level.
Investment manager at Wealth Club, Nicholas Hyett, said the findings suggest the combination of rising house prices and inflation will push up both the number of families paying IHT and the amount they pay.
“Without changes to the way IHTs are calculated, the number of people paying IHT could rise by 50% in a decade,” Hyett commented. “With the UK’s most hated tax hitting a growing number of families you can see why there are calls to abolish the tax, and why the government are said to be giving it serious consideration.
“Those families probably won’t be any better off in practice, and at the lower end might actually be worse off after the cost of living crisis. But the Government’s policy of freezing IHT allowances means they will be dragged into the taxman’s sights nonetheless.
“With IHT potentially raising over £9bn by 2029, according to our research, the Government will probably decide scrapping the tax altogether is too costly. But, if that’s the case we would urge them to at least look at raising IHT thresholds in line with inflation.
“Whether you prefer to call it ‘fiscal drag’ or a ‘stealth tax’ the current situation is clearly unfair. If the Government wants or needs to ask taxpayers for more it should be willing to make the argument out in the public.”
Recent Stories